Most companies around the globe strive for future readiness and invest a lot of energy and resources in having a crystal clear picture of the future. Just envision the countless outlooks and forecasts produced within organizations or other institutions. All of them appear in fancy graphs with percentage-based accuracy and security. Nevertheless, all of them rely more or less on one basic assumption that the road to the future is sort of linear, stable and predictable. Black swans and other “unplanned” events are not included. In addition, most of those forecasts and outlooks are missing proper links to the present. This leads to the risk of overlooking the importance of preparing the organization and its members for the predicted or any possible future.
Hence, the following aims to shed some light on the opportunities of predictive analytics to not only provide forecasts and outlooks, but also assist organizational development and HR planning today and on the road to come.
There is more than just one future
As indicated, outlooks and forecasts provide the false impression of having one predictable future. This also applies in cases where different outlooks under pre-set conditions are presented. Though this is important from a planning perspective and intends to convince investors, shareholders and other financial institutions, it is missing the perspective of what is going to happen to the organization and the people involved, in both reactions to and preparation for the future.
Therefore, required change is neglected or poorly linked to the outlook, despite organizational development or change management being considered. In most cases, the reason behind the negligence is that hardly anyone considers one crucial fact: the future is not shaped by the result but by the road, crossroads, blockings and diversions towards it. Analysing the road to the future or possible versions of the future is the moment of truth for any analytical capability within an organization, especially in an HR or organizational development (OD) context.
Evolution of HR and OD analytics
Every company and organization has at least a certain element of HR- or OD-related analytical capability within the organization. Even the smallest companies perform at least analytical work within an operational context up to tactical analytics. Most of this work relies on key performance indicators that are available on an ad-hoc or structured basis and organizations use them to start organizational development processes, unfortunately without sustainably integrating them in the process.
Larger companies do additionally consider strategic analytics as important for their business and use them to model at least parts of their business activities. Though this can also assist in setting up the organization for a continuous or planned development, it generally lacks the development and integration of scenarios. Using scenarios is more than just predicting numbers and results. It is also addressing turning points and considering dependencies and wild card events. Such an integrated analysis pushes the analytical skills of an organization to the level of predictive analytics.
Predictive Analytics from an OD and HR perspective
Despite what the name suggests, predictive analytics does not aim to provide a prediction of the future. The predominant scope is to provide predictions about events and circumstances that might occur on the road to the future considering various scenarios. This provides the organization with the appropriate options to react or proactively take action to benefit from arising opportunities.
Predictive analytics are superior to all other analytical levels as they focus on both qualitative and quantitative elements of analysis and in addition consider forward-looking information apart from pure data evaluation or descriptive trending.
By nature of the predominantly qualitative tools, the result of the tool or method is only as good as the source of information or thought. Hence, predictive analysis requires more than just data, regardless if it is big or smart. Apart from technical expertise and the appropriate tools, it requires an external view of the development that allows the incorporation of market trends and neutral expertise that is not biased by wishful thinking or an internal fight for resources. The later especially applies if predictive analytics fosters organizational development or HR decisions.
In summary, the traditional view of separating HR questions and organizational development from companywide analytics is as short-sighted as focusing on just predicting one future. Predictive analytics can assist organizations not only in preparing for multiple futures, but also guide HR in organizational development processes from start to future endeavours.